View on global markets for week starting 9th December 2019

Global Stock Indices

The week ahead is eventful. On 11^th December, it is the FOMC; according to our view the interest rate may remain unchanged. After Powell’s statement, stock market might witness a sharp correction that may continue till the weekend. Next week, a considerable weakness is possible in S&P500. Next Monday, gap down opening is possible.

For the current week, Monday may be mixed to negative. On Tuesday, Asian hours might be negative followed by recovery; closing may be positive.  On Wednesday, the market will be positive till FOMC. After FOMC (02.00 PM US Time), a correction will start and continue till Friday.

Next week as well, Wednesday to Friday shall witness a considerable drop.

On the higher side, S&P500 may move up to 3170. On the lower side, it can drop down to 3080 or 3070. S&P500 has support at 3139 and resistance at 3162. Last Friday, S&P500 closed at 3146 while DOW closed at 28025 and NASDAQ closed at 8400. RUSSELL closed at 1636.

As per our prediction last Friday, the market has opened gap down in Asian hours today. S&P500 opened at 3140 today and made a low of 3139.88. DOW made a low of 27963 while NASDAQ made a low of 8380. RUSSELL made a low of 1631. If it breaches 3139 then it can drop down to 3125. If it crosses 3150 then it can move up to 3162. For today, closing is indicated to be slightly bearish. On the 13^th, the outcome of BREXIT will also be announced. On 15^th, it is the deadline of the US imposing tariff on China which is dangerous for equities.

Precious Metals

Last Friday, bullion witnessed a decline after job data. This week, it is the FOMC which makes it unclear for the trend in precious metals. From 12^th or 13^th December, a U turn is expected. This uptrend may continue till the first week of January 2020. If Gold breaches 1458 then it can retest 1445 while its resistance lies at 1478. Silver has support at 16.45 which if not breached, can lead it to 17.00. Resistance for Silver lies at 16.80.

Today, uptrend is indicated for precious metals. But we are not clear about the trend for Tuesday and Wednesday but we shall remain bullish from a short term perspective.

MCX traders: Gold has support at 37700 and resistance at 37850. If the support is breached then Gold may retest 37500.  If the resistance is crossed then it may move up to 38000-38200. Silver has support at 43200 and resistance at 44100.

Energy Products

Crude has support at 57.40 and resistance at 60.50. Remain short in crude at higher levels. In coming days, it may breach 55 and further drop down to 52. Around 59.50, add short position in crude. Today, trend is downward for crude. On Tuesday, uptrend is indicated. After FOMC, sharp decline is possible which may continue till the weekend.

Indian Stock Market

Indian market traded as per our prediction in the previous week. Nifty made a low of 11929 while Bank Nifty made a low of 31323 on Friday. Nifty closed at 11960 while Bank Nifty closed at 31398.

For today, market may open slightly downward. From 09.45 HRS, it’ll start moving up with volatility till 14.30 HRS. From 14.30 HRS to closing, it is expected to trade downward. On Tuesday, gap down opening is possible followed by recovery; closing may be positive. On Wednesday, market may remain positive in the first half and will turn negative in the second half; this negativity may continue till Friday.

TRADING RANGE:

• NIFTY (FUT): 11900-12050
• BANK NIFTY (FUT): 31200-31600